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STORY: HOT GROWTH SCOREBOARD23
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SPECIAL REPORT
Hot Growth Companies TO WIN A POSITION IN THIS TABLE, a company must excel in three ways. The selection process begins by ranking companies according to their three-year results in sales growth, earnings growth, and return on invested capital. The ranks in the table are calculated from these numbers. A company’s composite rank is the sum of 0.5 times its rank in return on total capital plus 0.25 times its sales- and profit-growth ranks. COMPANIES WERE DRAWN from Standard & Poor’s Compustat database of more than 10,000 publicly traded corporations. To qualify, a company must have annual sales of more than $50 million and less than $1.5 billion, a current market value greater than $25 million, a current stock price of at
least $5, and be actively traded. Banks, insurers, real estate firms, and utilities are excluded. So are companies with declines in current financial results or in stock price, as well as companies where other developments raise questions about future performance. SALES AND EARNINGS are the latest figures available through the most recent 12 months. Earnings include net income from continuing operations before gains or losses from extraordinary items. INCREASES IN SALES AND PROFITS are calculated using the least-squares method. If results for the earliest year are negative or not available, the average is for two years.
COMPANY (STOCK SYMBOL)
CURRENT RESULTS SALES $ MIL.
1 PetMed Express (PETS) Pompano Beach, Fla. 954 979-5995
EARNINGS $ MIL.
87.4
6.2
210.2
23.2
664.2
RETURN ON CAPITAL is earnings expressed as a percent of debt and equity. For ranking purposes, the maximum allowable annual return on invested capital is 100%. If companies have made substantial accounting restatements, long-term returns may be averaged for two years instead of three years. TIME PERIODS VARY according to the month of a company’s fiscal yearend. Profitability and growth are calculated based on the most recently available data. STOCK PRICE DATA are as of May 5, 2004. A ● indicates that a company also appeared in last year’s rankings (BW—June 9, 2003).
THREE-YEAR AVERAGES INCREASE (%) SALES PROFITS
102.2
RETURN ON CAPITAL
INVESTMENT DATA STOCK PRICE MARKET 52-WEEK P-E VALUE HIGH - LOW RECENT RATIO $ MIL.
173.9
51.5
13 – 3
11
37
212
29.1 1242.9
68.5
48 – 24
46
53 1280
145.4
73.7
86.6
35.3
94 – 41
87
71 1383
427.4
32.0
61.7
137.0
28.7
27 – 10
23
21
734.9
54.3
53.7
88.2
28.2
25 – 11
24
26 1330
433.9
50.5
140.5
43.1
29.8
30 – 13
23
14
726.1
80.6
44.1
61.2
24.4
36 – 22
31
36 2816
768.5 100.2
43.3
52.9
27.4
48 – 19
44
38 3827
23.5
17.5
107.5
32.3
39 – 14
27
24
1214.5 225.9
19.9
53.7
35.1
45 – 21
44
37 8177
Online, phone, and mail-order retailer of pills for pets
2 Universal Technical Institute (UTI) Phoenix 623 445-9500 It trains car technicians
3 University of Phoenix Online (UOPX) Phoenix 800 366-9699 Higher education in virtual classrooms
4 Multimedia Games (MGAM) Austin, Tex. 512 334-7500
635
It’s laid a bet on electronic gambling
5 Aeropostale (ARO) New York 646 485-5398 ● Clothing stores for fashionable teens
6 Headwaters (HDWR) South Jordan, Utah 801 984-9400
746
Services for the energy industry; turning coal sludge into synth fuel
7 Corinthian Colleges (COCO) Santa Ana, Calif. 714 427-3000 ● For-profit provider of career-oriented education
8 Chico’s FAS (CHS) Fort Myers, Fla. 239 277-6200 ● Retailer of women’s fashions and accessories
9 USANA Health Sciences (USNA) Salt Lake City 801 954-7100
220.9
525
Nutritional supplements, foods, and body-care products
10 Coach (COH) New York 212 594-1850 ● Designer and manufacturer of leather goods and accessories
11 MTC Technologies (MTCT) Dayton 937 252-9199
212.5
13.9
34.7
27.1
32.5
33 – 18
27
26
352
362.9
87.3
40.9
92.9
15.9
74 – 27
69
36 3074
413.5
67.0
38.0
48.8
18.5
57 – 18
45
47 2887
429.1
15.1
50.0
155.3
15.0
42 – 18
32
22
345
465.4
58.7
24.5
35.3
22.3
28 – 14
19
13
687
114.2
7.0
18.1
271.7
17.2
23 – 5
14
26
162
572.0
48.0
30.7
26.7
21.2
32 – 15
23
24 1102
84.8
20.2
58.6
115.8
13.5
33 – 15
27
19
Info tech services for the U.S. government and commercial clients
12 Eon Labs (ELAB) Laurelton, N.Y. 718 276-8600 ● Manufactures generic drugs
13 Cognizant Technology Solutions (CTSH) Teaneck, N.J. 201 801-0233 ● Business outsourcing and consulting for tech needs
14 Central European Distribution (CEDC) Sarasota, Fla. 941 330-1558 ● Importers of beer, wine, and spirits in Poland
15 K-Swiss (KSWS) Westlake Village, Calif. 818 706-5100 The athletic shoemaker also sells clothes and accessories
16 Bio-Reference Laboratories (BRLI) Elmwood Park, N.J. 201 791-2600 Its Northeast labs do clinical tests and diagnosis
17 Hot Topic (HOTT) City of Industry, Calif. 626 839-4681 ● These stores carry the fashion and music trends of teens and tweens
18 Bradley Pharmaceuticals (BDY) Fairfield, N.J. 973 882-1505
419
Dermatology, respiratory, gastroenterology, and nutritional products
104 | BusinessWeek | June 7, 2004
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